Workiva’s first quarter results for 2025 were met with a negative market reaction, despite the company exceeding Wall Street’s revenue and adjusted profit expectations. Management attributed the quarter’s revenue growth to accelerated adoption of its multi-solution reporting platform, particularly among large enterprise clients. CEO Julie Iskow highlighted increased demand for both core financial reporting and newer solutions in governance, risk, and compliance. However, she acknowledged that a more cautious buying environment emerged late in the quarter, with clients delaying purchasing decisions amid regulatory and economic uncertainty. Iskow explained, “The uncertainties of regulatory change and the policies of the new U.S. administration have put pressure on the bookings momentum that we saw in the previous three quarters.”
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Workiva (WK) Q1 CY2025 Highlights:
- Revenue: $206.3 million vs analyst estimates of $204.1 million (17.4% year-on-year growth, 1.1% beat)
- Adjusted EPS: $0.14 vs analyst estimates of $0.07 (94.9% beat)
- Adjusted Operating Income: $4.99 million vs analyst estimates of $241,200 (2.4% margin, significant beat)
- The company reconfirmed its revenue guidance for the full year of $866 million at the midpoint
- Management reiterated its full-year Adjusted EPS guidance of $1.06 at the midpoint
- Operating Margin: -12%, down from -10.4% in the same quarter last year
- Customers: 6,385, up from 6,305 in the previous quarter
- Net Revenue Retention Rate: 110%, down from 112% in the previous quarter
- Annual Recurring Revenue: $742 million at quarter end, up 19.7% year on year
- Billings: $190.6 million at quarter end, up 21.6% year on year
- Market Capitalization: $3.63 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions Workiva’s Q1 Earnings Call
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Patrick Schulz (Baird) asked about maintaining full-year guidance despite a softer buying environment. CFO Jill Klindt explained they remain confident due to strong subscription growth and a large addressable market, but acknowledged continued caution in guidance assumptions.
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Adam Hotchkiss (Goldman Sachs) questioned what constitutes a "cautious buying environment" and whether deals are being pushed out. CEO Julie Iskow clarified that while growth continues, some customers are deferring decisions and spending more thoughtfully due to uncertainty.
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Steven Enders (Citi) inquired whether the slowdown in buying was isolated to sustainability solutions or broader. Iskow stated the cautious behavior was broad-based across product lines, not limited to any one segment or geography.
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Jacob Roberge (William Blair) asked about the impact of updated EU sustainability regulations on adoption cadence. Iskow confirmed that while the target market remains robust, many companies still rely on legacy systems, presenting ongoing opportunity for Workiva’s platform.
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Ryan Krieger (Wolfe Research) probed whether cautious spending was concentrated in particular industries or regions. Iskow reiterated that the trend was widespread and not tied to specific customer types.
Catalysts in Upcoming Quarters
Going forward, our team will watch closely for (1) signs of renewed bookings momentum as macro and regulatory clarity emerges; (2) the pace of adoption for new platform modules, particularly in sustainability and fund reporting; and (3) progress in deepening relationships with large enterprise customers through multi-solution expansion. Management’s ability to maintain margin discipline while investing in growth initiatives will also be a critical signpost.
Workiva currently trades at $65.80, down from $74.28 just before the earnings. Is there an opportunity in the stock?The answer lies in our full research report (it’s free).
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